Dairy farm hope up
WA dairy farmers can expect better contract terms in supplying milk, after an agreement was struck between processors and the Federal regulator.
Dairy processors Brownes, Lion Dairy and Drinks, and Parmalat/Harvey Fresh, were among the WA companies which agreed to amend specific terms in their milk supply agreements, addressing the Australian Competition and Consumer Commission’s concerns some terms were unfair to farmers. Other processors to agree included Norco and Fonterra.
The ACCC had worked with dairy processors to ensure terms in the contracts they offer farmers comply with the business-to-business unfair contract terms law enacted in November 2016.
The ACCC’s work focused on terms in milk supply contracts that had the potential to cause the greatest harm to farmers.
Most processors agreed to provide dairy farmers with the right to terminate their contract if the processor varies supply terms such as price or quality requirements, placing the farmer in a worse position.
The ACCC also raised concerns with some processors about lengthy notice periods for farmers to terminate their contracts, one-sided termination rights, broad indemnities, and terms that restrict a farmer’s ability to lease a farm or sell their cattle.